{"data":{"id":"us-ky/krs-286.4-450","jurisdiction":"us-ky","citation":"KRS 286.4-450","heading":"Bonding requirements for applications submitted on or after January 1,","body":"2020 -- Demonstration of financial condition -- Managing principal --\nBackground check -- Incomplete application -- Approval or rejection of\napplication -- Time limit -- Appeal -- Hearing -- Eligibility if license denied.\n(1) For any new application for a license, submitted on or after January 1, 2020, to\nqualify for a license, an applicant shall satisfy and maintain, for the duration of\nlicensure under this subtitle, the f ollowing bonding requirements, which shall cover\nall licensed locations:\n(a) The applicant shall deposit with the commissioner, in a form directed by the\ncommissioner, one (1) of the following instruments that satisfy the\nrequirements of paragraph (b) of this subsection:\n1. An irrevocable letter of credit;\n2. A corporate surety bond;\n3. Evidence that the applicant has established an account payable to the\ncommissioner in a federally insured financial institution in this state and\nhas deposited United States  currency in an amount that satisfies the\nrequirements of paragraph (b) of this subsection, with a signed and\nnotarized acknowledgement from the financial institution; or\n4. A savings certificate of a federally insured financial institution in this\nstate t hat is not available for withdrawal except by direct order of the\ncommissioner, with a signed and notarized acknowledgement from the\nfinancial institution. Interest earned on the certificate shall accrue to the\napplicant;\n(b) The instruments identified in paragraph (a) of this subsection shall:\n1. Be made payable to the commissioner;\n2. Be in the following amounts:\na. One hundred thousand dollars ($100,000), if the applicant is\nprivately held; or\nb. Two hundred fifty thousand dollars ($250,000), if the appl icant is\npublicly traded;\n3. Provide for claim on the instrument by the commissioner who has a\ncause of action under this subtitle. The total liability of the surety,\ncumulative or otherwise, shall not exceed the amount specified in the\ninstrument; and\n4. Be available for the recovery of expenses, fines, and fees levied or\nimposed by the commissioner under this subtitle, and for losses or\ndamages that are determined by the commissioner to have been incurred\nby any customer as a result of the applicant's or licensee's failure to\ncomply with the requirements of this subtitle; and\n(c) No claim shall be maintained to enforce any liability on an instrument under\nthis subsection unless the claim is brought within three (3) years after the act\nupon which it is based.\n(2) (a) For any application submitted on or after January 1, 2020, including renewal\napplications, an applicant or licensee shall demonstrate that its financial\ncondition is sufficient to effectively conduct the business of a licensee in one\n(1) or more  licensed Kentucky locations by having and maintaining, for the\nduration of licensure under this subtitle:\n1. If the applicant is privately held:\na. A total net worth of at least fifty thousand dollars ($50,000), when\nreceivables are one million dollars ($1,000,000) or less; or\nb. A total net worth of at least one hundred thousand dollars\n($100,000), when receivables are more than one million dollars\n($1,000,000); or\n2. If the applicant is publicly traded, a total net worth in excess of two\nhundred fifty thousand dollars ($250,000).\n(b) For the purposes of this subsection, receivables shall be determined upon the\ninitial application, or for renewal applications, based on the most recent\nannual report filed under KRS 286.4-590.\n(3) (a) Each applicant shall ha ve, at the time of making application and for the\nduration of licensure under this subtitle, at least one (1) managing principal.\n(b) Prior to a change in managing principal, each licensee shall file a written\nrequest for the change with the department. Th e written request shall include\nsufficient proof that the new managing principal has experience to satisfy the\nrequirements of this subsection, and the commissioner may deny the requested\nchange.\n(c) Each person named as a managing principal in an applicat ion or written\nrequest under this subsection shall provide the commissioner with sufficient\nproof that the managing principal has at least two (2) years of lending\nexperience working in a financial institution. The commissioner shall\ndetermine from the app lication or written request whether an applicant has\nsufficient experience to satisfy this requirement and may withhold approval\nbased on this determination.\n(4) (a) At the time of application, the commissioner shall require each managing\nprincipal and per son in control of an applicant or licensee to submit to a\ncriminal background check.\n(b) The cost of each records background check shall be borne by the applicant or\nlicensee.\n(5) The commissioner may deem an application incomplete if the applicant fails t o pay\nany fee, or submit any documentation or information, required under this subtitle\nwithin sixty (60) days from the date the application was filed. After sixty (60) days,\nif the application is incomplete, it shall be considered abandoned.\n(6) (a) Once a completed application is filed, and after an investigation, the\ncommissioner shall issue to the applicant a license to make loans in\naccordance with this subtitle, if the commissioner finds that the financial\nresponsibility, financial condition, experien ce, character, and general fitness\nof the applicant reasonably demonstrate that the applicant, its managing\nprincipal, and each person in control of the applicant will operate honestly,\nfairly, and efficiently in accordance with the purposes of this subtitle.\n(b) If the commissioner finds that the applicant does not meet the requirements\nunder paragraph (a) of this subsection, he or she shall not issue a license and\nshall return any license fee paid by the applicant, but shall retain the five\nhundred dollars ($500) investigation fee to cover the cost of investigating the\napplication.\n(c) When determining whether an applicant has satisfied the qualifications\nrequired under this subsection, the commissioner shall consider the grounds\nset forth in KRS 286.4-490.\n(d) The commissioner shall approve or deny every application for license within\nsixty (60) days from the receipt of a completed application, unless the time is\nextended by a written agreement between the applicant and the commissioner.\n(e) If the commiss ioner denies a license, the applicant may, within twenty (20)\ndays from the date of denial, file a written petition requesting a hearing to\nappeal with the office of the commissioner. Upon the timely filing of a\npetition to appeal, an administrative hearin g shall be conducted in accordance\nwith KRS Chapter 13B. If the applicant does not file a petition within the\nrequired time frame, he or she shall be deemed to have waived the right to\nappeal.\n(f) The official record of the hearing shall be filed in the of fice of the\ncommissioner as a public record, open to public inspection.\n(7) Any applicant, or person in control of an applicant, that has a license denied by the\ncommissioner shall not be eligible to apply for a license under this subtitle, or serve\nas a person in control of an applicant or licensee, until the expiration of one (1) year\nfrom the date a final order denying the license is entered by the commissioner.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=48937","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:11Z","sha256":"7a3e0eee3133b9f57b84ac4c80103bb1945f49b9e5511fe4587cb197f93b257b","source_id":"us-ky","stale":false,"prev":"us-ky/krs-286.4-440","next":"us-ky/krs-286.4-460"},"notice":"GroundRules: Original legal text. Not legal advice."}